FCC to Examine its Authority in Cable, Broadcast Fights

The FCC on Wednesday proposed a rulemaking that could broaden its authority to step in to battles between cable providers and broadcasters that have recently left some cable subscribers without service.

0shares

Fights between broadcasters and cable companies over licensing fees have led to several service blackouts in the last few years; Cablevision customers missed World Series games this year and almost missed the Oscars last year, for example.

But what can be done? When there are millions of dollars at stake, broadcasters and cable companies are likely more interested in their bottom lines than whether or not you get to see the first pitch or watch the red carpet coverage. And the government? Their hands are basically tied, thanks to limited statutory authority.

That could all change, however. The Federal Communications Commission on Wednesday announced that the agency will investigate whether it can broaden its authority without involving itself too much in private negotiations.

"The Media Bureau will prepare a notice that will take a broad look at what more we might do to advance the statutory objectives of allowing retrans fees to be set by market forces while protecting the interests of consumers," William T. Lake, chief of the FCC's Media Bureau, said in a speech before the Media Institue.

At issue are the fees that cable companies pay to broadcasters for the right to air their programming; known as retransmission consent in DC lingo. In recent years, cable companies have accused those broadcasters of demanding exorbitant fees. In a recent battle between News Corp.'s Fox and Cablevision, for example, Cablevision said News Corp. wanted $150 million for the right to air its shows; up from the $70 million it normally paid each year.

As a result, Cablevision customers lost access to Fox for several days while the two sides battled it out. Viewers who tuned into Fox were met with a recorded message detailing the struggle. Both sides also took to Twitter and the Web to make their cases, prompting some to suggest that Cablevision and Fox spend more time working on a solution instead of bashing one another online. The FCC issued calls for the two sides to work it out, but besides those warnings, there was little more it could do.

According to a fact sheet on the FCC Web site, the FCC is not generally authorized to participate in discussions between television stations and cable systems regarding retransmission consent agreements. Furthermore, the FCC cannot tell a cable operator which stations or program services to delete in order to comply with the must-carry requirement.

In the wake of the Cablevision-Fox battle, however, the FCC now wants input on what its role should be.

"If we can provide greater certainty to the marketplace, that
could help to guide the negotiating parties and reduce the number
of failed deals and dropped signals," Lake said.

The FCC does have the authority to step in and help in "good faith," but what consitutes good faith is somewhat cloudy. The rulemaking could help clear that up, Lake said.

"Because a principal concern is to protect consumers when talks break down, we may propose to strengthen our notice requirement and extend it to non‐cable distributors and broadcasters," he continued. "If some of our broadcast rules are thought to interfere with market negotiations, we may want to look at those rules."

Ideally, rules will "help us to find the most constructive role we can play to protect consumers under the retransmission law as it now exists," Lake said.

"Injecting Washington into private business negotiations that have a 99 percent success rate only serves to embolden pay-TV companies," Gordon Smith, president and CEO of NAB, said in a statement. "If the pay-TV giants succeed, there will be further migration of premiere sporting events like the Super Bowl away from free TV, and a reduction in financial resources that sustains quality foreign language programming, local news and entertainment to a growing audience of more than 30 million Americans who rely exclusively on over-the-air television."

Instead, Smith suggested "educating consumers with the multiple options available to them in the exceedingly rare instance when a retransmission consent dispute arises, including the antenna TV option."

The National Cable & Telecommunications Association, which represents the cable industry, said the proposed rulemaking "is a constructive step forward and serious review of a marketplace that has undergone significant changes and merits a fresh look."

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
More »

Automatic Renewal Program: Your subscription will continue without interruption for as long as you wish, unless
you instruct us otherwise. Your subscription will automatically renew at the end of the term unless you authorize
cancellation. Each year, you'll receive a notice and you authorize that your credit/debit card will be charged the
annual subscription rate(s). You may cancel at any time during your subscription and receive a full refund on all
unsent issues. If your credit/debit card or other billing method can not be charged, we will bill you directly instead. Contact Customer Service

//our current issue

Select Term:

24 issues for $29.99 ONLY $1.25 an issue! Lock in Your Savings!

12 issues for $19.99ONLY $1.67 an issue!

State

Country

This transaction is secure

Automatic Renewal Program: Your subscription will continue without interruption for as long as you wish, unless
you instruct us otherwise. Your subscription will automatically renew at the end of the term unless you authorize
cancellation. Each year, you'll receive a notice and you authorize that your credit/debit card will be charged the
annual subscription rate(s). You may cancel at any time during your subscription and receive a full refund on all
unsent issues. If your credit/debit card or other billing method can not be charged, we will bill you directly instead. Contact Customer Service